PROPOSED TAX CHANGES

It is Monday, at the dawn of a new week, and one of the big talking points in the area of personal income tax is the discussion starting in Federal Parliament where Prime Minister, Anthony Albanese, is aiming to get legislation through to adjust some planned tax cuts to better benefit lower income earners.

So, if you are sitting down with your favourite mug in hand, and you are not quite sure what this is all about, we, your local Tax Accountants, are here to give you a brief outline of what's expected.

Now as I sit here writing this, the discussion has not officially started and who knows what the week will bring, but if you are ready to help try to untangle a piece of the complex web of Australia's latest tax changes, here we go.

The government, in a move that feels a bit like a financial spring clean, is shaking up the tax system to lighten the load on low and some middle-income earners, while tightening the purse strings on those at the top end of town.

Here's the proposal: starting from July 1, the tax rates are getting a makeover. If you're earning up to A$135,000, you're about to slide into a lower tax bracket, which means a bit more cash in your pocket each payday. On the flip side, the folks pulling in the bigger bucks will see their tax breaks shrink. They will get some tax breaks but not as big as they expected that were legislated under the previous government.

The aim? To spread the wealth a bit more evenly and give a helping hand to those feeling the pinch.

With the cost of living soaring and inflation making us all a bit jittery, the government says it is stepping in to help to ease the pressure on Australian families, the intention being to provide a bit of financial relief when it's needed most.

Under the proposed new scheme, the tax rates are getting a tweak:

• The 19% rate drops to 16%.
• The 32.5% rate goes down to 30%.
• And there are bumps up in the thresholds for the 37% and 45% rates, giving a bit of breathing room for some of those in the middle.

While the high earners might be tightening their belts a bit, the focus is on easing the load for the lower-earning Aussie — the individuals and families who feel every rise in grocery bills, mortgages and petrol prices.

So, what's the bottom line? This tax shake-up is a bit like Robin Hood - taking from the higher earners and giving more to the lower earners.

We will update you with the full details once the legislation is passed and we have the actual details to hand. But if you have been wondering what all the chat has been about, hopefully, this info has helped clear the air.

Talk to you again soon.

For more information, email us today at admin@hillsaccounting.com.au or call us on 03 62737800